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Month: March 2017

The creation of the DIFC common law jurisdiction in coexistence with the civil law jurisdiction of the UAE has been a unique and successful development.

The DIFC Courts have established themselves as a conduit jurisdiction for the recognition and enforcement of both domestic (i.e. onshore, or mainland Dubai) and foreign arbitral awards for onward execution against assets of award debtors in onshore Dubai even in the absence of any connection with the DIFC. Notwithstanding this, the proximity of the two jurisdictions, onshore and DIFC, has given rise to questions of jurisdictional conflict.

In order to overcome a conflict of judgments and by adoption of a decree last year (see Decree No. (19) of 2016 forming the Judicial Committee of the Dubai Court and the DIFC Courts, dated 9 June 2016), which entered into immediate effect, the Ruler of Dubai established a Judicial Committee of the Dubai Courts and the DIFC Courts (the Dubai Judicial Committee).

The Dubai Judicial Committee is comprised of seven members: three judges from the DIFC Courts, three judges from the Dubai Courts and the Secretary General of Dubai’s Judicial Council, with the President of the Dubai Court of Cassation (one of the three Dubai Court judges) having the casting vote.

The Dubai Judicial Committee has been established to promote the full mutual integration of the Dubai and DIFC Courts and to internalise any constitutional conflict between the onshore Dubai Courts and the DIFC Courts.

The Dubai Judicial Committee rendered its first decision in the case of Daman Real Capital Partners Company LLC v. Oger Dubai LLC (Cassation No. 1/2016) where it was asked to decide which of the two courts, the DIFC Courts or the onshore Dubai Courts, had jurisdiction to hear the case.

The case involved two parallel actions before the two courts, specifically (1) an application for annulment of a DIAC award rendered in mainland Dubai as the seat of the arbitration before the onshore Dubai Courts which were the courts with supervisory jurisdiction over the arbitration and (2) an application for the recognition and enforcement of that award before the DIFC Courts for execution in the DIFC. It is crucial to note that the action for annulment before the onshore Dubai Courts was served first and preceded the action for recognition and enforcement before the DIFC Courts.

In the DIFC Court proceedings, the DIFC Court ordered a stay of the enforcement action awaiting the outcome of the annulment action in the onshore Dubai Courts, however, only on the condition and order that Daman paid security into court. After failing to comply with this order, the DIFC Court proceeded to recognise and enforce the award and ordered that Daman be wound up.

Alongside this, the onshore Dubai Courts, hearing Daman’s annulment case, held that they had lacked jurisdiction to do so as the DIFC Court had already declared the enforceability of the award. Following this decision, Daman applied to the Dubai Judicial Committee on the grounds that a conflict of jurisdiction had occurred between the onshore Dubai Courts and the DIFC Courts.

Against this background, the Dubai Judicial Committee held that:

there was a conflict of jurisdiction between the two courts;

the case be remitted for trial to the Dubai Courts;

the DIFC Courts“should cease from entertaining the case” and

“there is no similarity between this case and the case when it’s sought to enforce or annul a foreign arbitral award in several jurisdictions pursuant to the New York Convention 1958”.

All three of the DIFC Court judges sitting on the Committee dissented from the ruling that the DIFC Courts should cease from entertaining the case.

It is clear from the Dubai Judicial Committee’s findings that in order to prevent a conflict of jurisdiction that may occur from contradictory outcomes of the courts, the Dubai Judicial Committee relied on a first-seized rule, giving preferential jurisdiction to the onshore Dubai Courts, which were seized in an action for annulment of the award prior to the application for ratification and enforcement being filed with the DIFC Courts.

The legal analysis surrounding the Dubai Judicial Committee’s decision is short and lacks guidelines further assist the parties and legal professionals in general. Given the current lack of detail in the Dubai Judicial Committee’s findings that the DIFC Court “should cease from entertaining the case“, it is currently difficult to form a decisive view as to the full reasoning behind the decision.

In another development relating to the DIFC Courts, the Dubai Court of First Instance issued a judgment on 15 February 2017 annulling the DIFC Courts’ judgments in the case of Meydan v Banyan Tree. This development comes soon after the Dubai Judicial Committee’s ruling in the Daman Real Capital Partners Company LLC v. Oger Dubai LLC case which has effectively limited the ability of the DIFC Courts to act as a conduit jurisdiction for domestic awards.

The judgment of the Dubai Court of First Instance in Meydan v Banyan Tree suggests that further guidance and more detailed reasoning from The Judicial Committee in the future would greatly assist the legal community in making its own determination when considering the scope and acceptance of the jurisdiction of the DIFC Courts across onshore Dubai

Dubai’s new ‘One Day Court’ – also known as ‘One Day Misdemeanor Court’, initiative was officially rolled out on 8 March 2017 with the aim ensuring swifter justice in the legal process for at least 21 types of minor offences – such as cheque disputes, alcohol related offences, residency and traffic cases.

The new court initiative was approved by His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, and Ruler of Dubai, as part of Penal Order Law No. 1 of 2017 on 7 March 2017, and extends across all Dubai police stations.

Reducing litigation waiting time by 60%

One of the main disadvantages with the current judicial process in Dubai is the lengthy waiting period for scheduling of court dates, and for the supporting investigation to take place. The initiative aims to combat waiting periods and subsequent costs associated with those detained for minor offences, and will serve to streamline the litigation process in a city with an ever-expanding population and lodging of criminal cases to go with it.

Based on a pilot of the ‘One Day Misdemeanor Court’ initiative in 2015, trialed with the General Directorate of Residency & Foreigners’ Affairs; the Traffic Department; and Al Muraqqabat police station, it is predicted that waiting times for minor offenses will be reduced by 60%.

Fast-tracking verdicts

Onsite Public Prosecution and courts set-up at police stations will simplify the process for individuals with a two-phase verdict process delivered within 24-hours. This provides scope for many petty cases to be directly handled and settled by the Public Prosecution by way of a ‘punitive order’, without the requirement for court involvement. More minor crimes may be settled with the issuance of fines, without impacting the integrity of the law.

Examples of legal cases facilitated:

General Directorate of Residency & Foreigners’ Affairs
• Illegal entry and residence in UAE
• Returning to UAE after deportation
• Working after labour ban issue

The ‘One Day Court’ initiative will seek to benefit much of the Emirate’s community, especially expatriates who find themselves involved in minor offenses, where uncertainty in the legal processes and timings can create a more stressful situation. The increased efficiency of these types of cases may provide more reassurance and clarity for individuals who have found themselves in these circumstances.

Davidson and Co has extensive experience in litigation and dispute resolution, and our lawyers and legal consultants are equipped to advise and support on a broad range of legal matters including those outlined in the ‘One Day Court’ initiative.

To get in touch, please call us on +971 4 343 8897 or simply click here to send us a message.